THE COST ACCOUNTANTS ACT, 1959 
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ARRANGEMENT OF SECTIONS 
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CHAPTER I 
PRELIMINARY 

SECTIONS 

1.  Short title, extent and commencement. 
2.  Definitions and interpretation. 

CHAPTER II 
THE INSTITUTE OF COST ACCOUNTANTS 

3.  Incorporation of the Institute. 
4.  Entry of names in the Register of members. 
5.  Fellows and Associates. 
6.  Certificate of practice. 
7.  Members to be known as cost accountants. 
8.  Disabilities. 

CHAPTER III 

COUNCIL OF THE INSTITUTE 

9.  Constitution of the Council of the Institute. 
10.  Re-election or re-nomination to Council. 
10A. Settlement of disputes regarding election. 
10B. Establishment of Tribunal. 
11.  Nomination in default of election. 
12.  President and Vice-president. 
13.  Resignation of membership and casual vacancies. 
14.  Duration and dissolution of Council. 
15.  Functions of the Council. 
15A. Functions of Institute. 
15B. Imparting education by Universities and other bodies. 
16. Officers and employees, salary, allowances, etc. 
17. Committees of the Council. 
18. Finances of the Council. 

CHAPTER IV 
REGISTER OF MEMBERS 

19. Register of members. 

20. Removal from the Register of members. 

CHAPTER V 
  MISCONDUCT 

21. Disciplinary Directorate. 

21A. Board of Discipline. 

21B. Disciplinary Committee. 
21C.  Authority,  Disciplinary  Committee,  Board  of  Discipline  and  Director  (Discipline)  to  have 

powers of civil court. 
21D.Transitional provisions. 

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SECTIONS 

22.  Professional or other misconduct defined. 
22A. Constitution of Appellate Authority. 
22B. Term of office of members of Authority. 
22C. Procedure, etc., of Authority. 
22D. Officers and other staff of Authority. 
22E. Appeal to Authority. 

23. Constitution and functions of Regional Councils. 

CHAPTER VI 

REGIONAL COUNCIL 

CHAPTER VII 

PENALTIES 

24. Penalty for falsely claiming to be a member, etc. 
25. Penalty for using name of the Council, awarding degrees of cost accountancy, etc. 
26. Companies not to engage in cost accountancy. 
27. Unqualified persons not to sign documents. 
28. Offences by companies. 
29. Sanction to prosecute. 

CHAPTER VIIA 
QUALITY REVIEW BOARD 

29A. Establishment of Quality Review Board. 
29B. Functions of Board. 
29C. Procedure of Board. 
29D. Terms and conditions of service of Chairperson and members of Board and its expenditure. 

CHAPTER VIII 

DISSSOLUTION OF THE INSTITUTE OF COST AND WORKS ACCOUNTANTS REGISTERED UNDER THE 
COMPANIES ACT, 1956 (1 OF 1956) 

30. Dissolution of the Institute of Cost and Works Accountants registered under the Companies Act, 

1956. 

31. Transfer of assets and liabilities of the dissolved company to the Institute. 
32. Provisions respecting employees of the dissolved company. 

CHAPTER IX 
MISCELLANEOUS 

33. [Omitted.] 
34. Coordination Committee. 
35. Directions of the Central Government. 
36. Protection of action taken in good faith. 
36A. Members, etc., to be public servants. 
37. Maintenance of branch offices. 
38. Reciprocity. 
38A. Power of Central Government to make rules. 
39. Power to make regulations. 
40. Rules, regulations and notifications to laid before Parliament. 

THE FIRST SCHEDULE. 
THE SECOND SCHEDULE. 

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THE COST ACCOUNTANTS ACT, 1959 

ACT NO. 23 OF 1959 

[19th May, 1959.] 
An  Act  to  make  provision  for  the  1[regulation  and  development  of  the  profession  of  cost 
accountants]. 

BE it enacted by Parliament in the Tenth Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1. Short title, extent and commencement.—(1) This Act may be called the 2[Cost Accountants] Act, 

1959. 

(2) It extends3 to the whole of India 4***; 

(3)  It  shall  come  into  force  on  such  date5  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint. 

2. Definitions and interpretation.—(1) In this Act, unless the context otherwise requires,— 

(a) “associate” means an associate member of the Institute; 

6[(aa) “Authority” means the Appellate Authority referred to in section 22A; 

(aaa) “Board” means the Quality Review Board constituted under section 29A]; 

7[(ab) “Board of Discipline” means the Board of Discipline constituted under sub-section (1) of 

section 21A; 

(ac)  “Companies  Act”  means  the  Companies  Act,  2013  (18  of  2013)  or  any  other  previous 

company law as defined in clause (67) of section 2 of the said Act;] 

(b) “cost accountant” means a person who is a member of the Institute; 

(c) “Council” means the Council of the Institute 7[constituted under section 9]; 

7[(ca)  “Director  (Discipline)”  means  the  Director  (Discipline)  referred  to  in  section  21  and 

includes Joint Director (Discipline); 

(cb)  “Disciplinary  Committee”  means 

sub-section (1) of section 21B; 

(cc)  “Disciplinary  Directorate”  means 

sub-section (1) of section 21;] 

the  Disciplinary  Committee  constituted  under                      

the  Disciplinary  Directorate  established  under                

(d) “dissolved company” means the Institute of Cost and Works Accountants registered under the 

Companies Act,8***; 

9[(e) “fellow” means a fellow member of the Institute;] 

10[(ea)“firm”  shall  have  the  meaning  assigned  to  it  in  section  4  of  the  Indian  Partnership  Act, 

1932 (9 of 1932), and includes,— 

1. Subs. by Act 12 of 2022, s. 38, for “regulation of the profession of cost and work accountants” (w.e.f. 10-5-2022). 
2. Subs. by s. 39, ibid., for “Cost and Works Accountants” (w.e.f. 10-5-2022). 
3. This is made applicable union territory Goa, Daman and Diu, s. 3 and the Schedule (w.e.f. 1-8-1965). 
4. The words “except the State of Jammu and Kashmir” omitted by Act 25 of 1968, s. 2 and the Schedule (w.e.f. 15-8-1968). 
5. 28th May, 1959, vide notification No. G.S.R. 610, dated 25th May, 1959, see Gazette of India, Extraordinary, Part II, sec. 3(i). 
6. Ins. by Act 7 of 2006, s. 2 (w.e.f. 8-8-2006). 
7. Ins. by Act 12 of 2022, s. 40 (w.e.f. 10-5-2022). 
8. The figure “1956” omitted by s. 40, ibid. (w.e.f. 10-5-2022). 
9. Subs. by s. 40, ibid., for clause (e) (w.e.f. 10-5-2022). 
10. Ins. by Act 10 of 2012, s. 2 (w.e.f. 1-2-2012). 

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(i) the limited liability partnership as defined in clause (n) of sub-section (1) of section 2 of 

the Limited Liability Partnership Act, 2008 (6 of 2009); or 

(ii) the sole proprietorship,  

registered with the Institute;] 

(f) “Institute” means the 1[Institute of Cost Accountants of India] constituted under this Act; 

2[(fa) “notification” means a notification published in the Official Gazette and the term “notify” 

shall be construed accordingly;]  

3[(fb) “partner” shall have the meaning assigned to it in section 4 of the Indian Partnership Act, 
1932 (9 of 1932) or in clause (q) of sub-section (1) of section 2 of the Limited Liability Partnership 
Act, 2008 (6 of 2009), as the case may be; 

(fc) “partnership” means— 

(A) a partnership as defined in section 4 of the Indian Partnership Act, 1932 (9 of 1932); or 

(B) a limited liability partnership which has no company as its Partner;] 

(g) “prescribed” means prescribed by regulations made under this Act;  

(h) “President” means the President of the Council; 

4[(i)  “Register”  means  the  Register  of  members  of  the  Institute  maintained  under  section  19  or 

Register of firms of the Institute maintained under section 20B, as the case may be;] 

5[(ia) “specified” means specified by rules made by the Central Government under this Act; 

 3[(iaa)  “sole  proprietorship”  means  an  individual  who  engages  himself  in  the  practice  of  cost 

accountancy or offers to perform services referred to in clauses (ii) to (iv) of sub-section (2);] 

6[(iaaa) “Standing Committee” means a Standing Committee constituted under sub-section (1) of 

section 17;] 

(ib) “Tribunal” means a Tribunal established under sub-section (1) of section 10B;]  

(j) “Vice-President” means the Vice-President of the Council; 

(k) “year” means the period commencing on the 1st day of April of any year and ending on the 

31st day of March of the succeeding year. 

(2)  Save  as  otherwise  provided  in  this  Act,  a  member  of  the  Institute  shall  be  deemed  “to  be  in 
practice” when, individually or in partnership with one or more members of the Institute in practice, 3[or 
in  partnership  with  members  of  such  other  recognised  professions  as  may  be  prescribed]  he,  in 
consideration of remuneration received or to be received,— 

(i) engages himself in the practice of 7[cost accountancy]; or 

(ii) offers to perform or performs services involving the costing or pricing of goods or services or 
the preparation, verification or 8[certification or auditing of cost accounting and related statements or 
holds himself out to the public as a cost accountant in practice]; or 

1. Subs. by Act 10 of 2012, s. 2, for “Institute of Cost and Works Accountants of India” (w.e.f. 1-2-2012). 
2. Subs. by Act 12 of 2022, s. 40, for clause (fa) (w.e.f. 10-5-2022). 
3. Ins. by Act 10 of 2012, s. 2 (w.e.f. 1-2-2012). 
4. Subs. by Act 12 of 2022, s. 40, for clause (i) (w.e.f. 10-5-2022). 
5. Ins. by Act 7 of 2006, s. 2 (w.e.f. 8-8-2006). 
6. Ins. by Act 12 of 2022, s. 40 (w.e.f. 10-5-2022). 
7. Subs. by Act 10 of 2012, s. 2, for “cost and works accountancy” (w.e.f. 1-2-2012). 
8.  Subs. by  s.  2,  ibid.,  for  “certification  of  cost  accounting  and  related  statements  or  holds  himself  out  to  the public  as  a  cost 

accountant in practice” (w.e.f. 1-2-2012). 

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(iii) renders professional services or assistance in or about matters of principle or detail relating to 

cost accounting procedure or the recording, presentation or certification of costing facts or data; or 

(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a cost 

accountant in practice; 

and  the  words  “to  be  in  practice”,  with  their  grammatical  variations  and  cognate  expressions,  shall  be 
construed accordingly. 

Explanation.—A member of the Institute who is a whole-time salaried employee of any person shall 

not be deemed to be in practice within the meaning of this sub-section. 

CHAPTER II 

THE INSTITUTE OF COST 1*** ACCOUNTANTS 

3. Incorporation of the Institute.—(1) All persons whose names are entered in the Register at the 
commencement of this Act and all persons who may hereafter have their names entered in the Register 
under the provisions of this Act, so long as they continue to have their names borne on the said Register, 
are hereby constituted a body corporate by the name of the 2[Institute of Cost Accountants of India], and 
all such persons shall be known as members of the Institute. 

(2) The Institute shall have perpetual succession and a common seal, and shall have power to acquire, 

hold and dispose of property, both movable and immovable, and shall by its name sue or be sued. 

4.  Entry  of  names  in  the  3[Register  of  members].—(1)  Any  of  the  following  persons  shall  be 

entitled to have his name entered in the 3[Register of members], namely:— 

(i) any person who was an associate or a fellow of the dissolved company (other than an honorary 
associate or honorary fellow thereof) immediately before the commencement of this Act, except any 
such person who is not a permanent resident of India and is not at such commencement practicing as 
a cost accountant in India; 

(ii)  any  person  who  has  passed  such  examination  and  completed  such  training  as  may  be 

prescribed for members of the Institute; 

(iii)  any  person  who,  at  the  commencement  of  this  Act,  is  engaged  in  the  practice  of  cost 
accountancy in India and who fulfills such conditions as the Central Government or the Council may 
specify in this behalf; 

(iv)  any  person  who  has  passed  such  other  examination  and  completed  such  other  training 
4[outside India] as is recognised by the Central Government or the Council as being equivalent to the 
examination and training prescribed for members of the Institute: 

Provided  that  in  the  case  of  any  person  who  is  not  permanently  residing  in  India,  the  Central 

Government or the Council may impose such further conditions as it may deem fit; 

(v)  any  person  domiciled  in  India,  who  at  the  commencement  of  this  Act  is  studying  for  any 
foreign examination and is at the same time undergoing training, whether within or  4[outside India], 
or,  who,  having  passed  such  examination,  is  at  such  commencement  undergoing  training  whether 
within or 4[outside India]: 

Provided that such foreign examination and training are recognised by the Central Government or 

the Council in this behalf: 

Provided  further  that  the  person  passes  the  examination  and  completes  his  training  within  five 

years from the commencement of this Act. 

1.  The heading “AND WORKS” omitted by Act 12 of 2022, s. 41 (w.e.f. 10-5-2022). 
2. Subs. by Act 10 of 2012, s. 3, for “Institute of Cost and Works Accountants of India” (w.e.f. 1-2-2012). 
3. Subs. by Act 12 of 2022,  s. 42, for “Register” (w.e.f. 10-5-2022). 
4. Subs. by s. 42, ibid., for “without India” (w.e.f. 10-5-2022). 

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(2) Every person belonging to the class mentioned in clause (i) of sub-section (1) shall have his name 

entered in the 1[Register of members] without the payment of any entrance fee. 

2[(3) Every person belonging to any of the classes mentioned in clauses (ii), (iii), (iv) and (v) of sub-
section (1) shall have his name entered in the  1[Register of members] on an application being made and 
granted in the prescribed manner and on payment of such fees, as may be determined, by notification, by 
the Council 3***: 

4* 

* 

* 

* 

*.]   

(4) The Central Government shall take such steps as may be necessary for the purpose of having the 
names  of  all  persons  belonging  to  the  class  mentioned  in  clause  (i)  of  sub-section  (1)  entered  in  the 
1[Register of members] at the commencement of this Act. 

5.  Fellows  and  Associates.—(1)  The  members  of  the  Institute  shall  be  divided  into  two  classes 

designated respectively as associates and fellows. 

(2) Any person other than a person to whom the provisions of sub-section (3) apply shall, on his name 
being  entered  in  the  5[Register  of  members],  be  deemed  to  have  become  an  associate  member  of  the 
Institute and so long as his name remains so entered, shall be entitled to use the letters 6[ACMA] after his 
name to indicate that he is an associate member of the 7[Institute of Cost Accountants of India]. 

(3)  Any  person  who  was  a  fellow  of  the  dissolved  company  and  who  is  entitled  to  have  his  name 
entered in the 5[Register of members],  under clause (i) of sub-section (1) of section 4, shall be entered in 
the 5[Register of members] as a fellow of the Institute. 

8[(4)  A  member,  being  an  associate  who  has  been  in  continuous  practice  in  India  for  at  least  five 
years, whether before or after the commencement of this Act, or whether partly before and partly after the 
commencement of this Act, and a member who has been an associate for a continuous period of not less 
than  five  years  and  who  possesses  such  qualifications  as  the  Council  may  prescribe  with  a  view  to 
ensuring that he has experience equivalent to the experience normally acquired as a result of continuous 
practice  for  a  period  of  five  years  as  a  cost  accountant  shall,  on  payment  of  such  fees,  as  may  be 
determined, by notification, by the Council,  9*** and on application made and granted in the prescribed 
manner, be entered in the Register as a fellow of the Institute: 

10*   

* 

* 

* 

*. 

Explanation I.—For the purposes of this sub-section, a person shall be deemed to have practiced in 
India for any period for which he has held a certificate of practice under section 6, notwithstanding that he 
did not actually practice during that period. 

Explanation II.—In computing the continuous period during which a person has been an associate of 
the Institute, there shall be included any continuous period during which the person has been an associate 
of the dissolved company immediately before he became an associate of the Institute.] 

(5) Any person whose name is entered in the  5[Register of members] as a fellow of the Institute and 
so  long  as  his  name  remains  so  entered,  shall  be  entitled  to  use  the letters 11[FCMA]  after  his  name  to 
indicate that he is a fellow of the 7[Institute of Cost Accountants of India]. 

1. Subs. by Act 12 of 2022, s. 42, for “Register” (w.e.f. 10-5-2022). 
2. Subs. by Act 7 of 2006, s. 3, for sub-section (3) (w.e.f. 8-8-2006). 
3. The words “, which shall not exceed rupees three thousand” omitted by Act 12 of 2022, s. 42 (w.e.f. 10-5-2022). 
4. The proviso omitted by s. 42, ibid. (w.e.f. 10-5-2022). 
5. Subs. by s. 43, ibid., for “Register” (w.e.f. 10-5-2022). 
6. Subs. by Act 10 of 2012, s. 4, for “AICWA” (w.e.f. 1-2-2012). 
7. Subs. by s. 4, ibid. ,for “Institute of Cost and Works Accountants” (w.e.f. 1-2-2012). 
8. Subs. by Act 7 of 2006, s. 4, for sub-section (4) (w.e.f. 8-8-2006). 
9. The words “which shall not exceed rupees five thousand,” omitted by Act 12 of 2022, s. 43 (w.e.f. 10-5-2022). 
10. The proviso omitted by s. 43, ibid. (w.e.f. 10-5-2022). 
11. Subs. by Act 10 of 2012, s. 4, for “FICWA” (w.e.f. 1-2-2012). 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
6. Certificate of practice.—(1) No member of the Institute shall be entitled to practise, whether in 

India or elsewhere, unless he has obtained from the Council a certificate of practice. 

1[(2)  Every  such  member  shall  make  an  application  in  such  form,  and  pay  such  annual fee, for  his 
certificate as may be determined, by notification, by the Council, 2*** and such fee shall be payable on or 
before the 1st day of April in each year: 

3* 

* 

* 

* 

* 

4[Provided  that]  if  a  member  of  the  Institute,  who  was  in  practice  immediately  before  the 
commencement  of  this  Act,  has  made  within  one  month  of such  commencement  an  application for the 
grant of certificate of practice, he shall not be deemed to have contravened the provisions of sub-section 
(1) by reason of his having practiced during the period between such commencement and the disposal of 
the application]; 

5[(3) The certificate of practice obtained under sub-section (1) may be cancelled by the Council under 

such circumstances as may be prescribed.] 

7. Members to be known as cost accountants.—Every member of the Institute in practice shall, and 
any other member may, use the designation of a cost accountant and no member using such designation 
shall use any other description, whether in addition thereto or in substitution therefore: 

Provided that nothing in this section shall be deemed to prohibit any such member from adding any 
other description or letters to his name, if entitled thereto, to indicate membership of such other Institute 
of accountancy, whether in India or elsewhere, as may be recognised in this behalf by the Council, or any 
other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the 
Institute and in practice, from being known by its firm name as cost accountants. 

8.  Disabilities.—Notwithstanding  anything  contained  in  section  4,  a  person  shall  not  be  entitled  to 

have his name entered in, or borne on, the 6[Register of members] if he— 

(i) has not attained the age of twenty-one years at the time of his application for the entry of his 

name in the 6[Register of members]; or 

(ii) is of unsound mind and stands so adjudged by a competent court; or 

(iii) is an undischarged insolvent 7[or undischarged bankrupt]; or 

7[(iiia) is declared bankrupt under the Insolvency and Bankruptcy Code, 2016 (31 of 2016);] 

(iv)  being  a  discharged  insolvent,  has  not  obtained  from  the  court  a  certificate  stating  that  his 

insolvency was caused by misfortune without any misconduct on his part; or 

(v)  has  been  convicted  by  a  competent  court  whether  within  or  8[outside  India],  of  an  offence 
involving  moral  turpitude  and  punishable  with  imprisonment  or  of  an  offence,  not  of  a  technical 
nature, committed by him in his professional capacity unless in respect of the offence committed he 
has  either  been  granted  a  pardon  or,  on  an  application  made  by  him  in  this  behalf,  the  Central 
Government has, by an order in writing removed the disability; or 

(vi) has been removed from membership of the Institute on being found on inquiry to have been 

guilty of professional or other misconduct: 

Provided that a person who has been removed from membership for a specified period, shall not be 

entitled to have his name entered in the 6[Register of members] until the expiry of such period. 

1. Subs. by Act 7 of 2006, s. 5, for sub-section (2) (w.e.f. 8-8-2006). 
2. The words “which shall not exceed rupees three thousand” omitted by Act 12 of 2022, s. 44 (w.e.f. 10-5-2022). 
3. The proviso omitted by s. 44, ibid. (w.e.f. 10-5-2022). 
4. Subs. by s. 44, ibid., for “Provided further that” (w.e.f. 10-5-2022). 
5. Ins. by Act 7 of 2006,  s. 5 (w.e.f. 8-8-2006). 
6. Subs. by Act 12 of 2022, s. 45, for “Register” (w.e.f. 10-5-2022). 
7. Ins. by s. 45, ibid. (w.e.f. 10-5-2022). 
8. Subs. by s. 45, ibid., for “without India” (w.e.f. 10-5-2022). 

7 

 
 
 
 
 
 
 
 
 
 
 
                                                           
CHAPTER III 

COUNCIL OF THE INSTITUTE 

9. Constitution of the Council of the Institute.—(1) There shall be a Council of the Institute for the 
management of the affairs of the Institute and for discharging the functions assigned to it by or under this 
Act. 

1[(2) The Council shall be composed of the following persons, namely:— 

(a)  not  more  than  fifteen  persons  elected  by  the  members  of  the  Institute,  from  amongst  the 
fellows  of  the  Institute  chosen  in  such  manner  and  from  such  regional  constituencies  as  may  be 
specified: 

Provided  that  a  fellow  of  the  Institute,  who  has  been  found  guilty  of  any  professional  or  other 
misconduct,  and  whose  name  is  removed  from  the  2[Register  of  members]  or  has  been  awarded 
penalty of fine, shall not be eligible to contest the election,— 

(i)  in  case  of  misconduct  falling  under  the  First  Schedule  of  this  Act,  for  a  period  of 

3[four years]; 

(ii) in case of misconduct falling under the Second Schedule of this Act, for a period of 

4[eight years], 

from  the completion  of the  period  of removal  of  name  from  the  2[Register  of  members]  or  payment  of 
fine, as the case may be; 

(b) not more than five persons nominated in the specified manner by the Central Government.] 

5[(3) No person holding a post under the Central Government or a State Government shall be eligible 

for election to the Council under clause (a) of sub-section (2). 

(4) No 6[member of the Institute or any partner of a firm] who has been auditor of the Institute shall 
be eligible for election to the Council under clause (a) of sub-section (2) for a period of 7[four years] after 
he ceases to be an auditor.] 

8[10.  Re-election  or  re-nomination  to  Council.—A  member  of  the  Council,  elected  or  nominated 

under sub-section (2) of section 9, shall be eligible for re-election or as the case may be,re-nomination: 

Provided that no member shall hold the office for more than two consecutive terms: 

Provided further that  a  member  of  the  Council,  who is  or  has  been  elected as  President  under  sub-

section (1) of section 12, shall not be eligible for election or nomination as a member of the Council.] 

9[10A.  Settlement  of  disputes  regarding  election.—In  case  of  any  dispute  regarding  any  election 
under  clause  (a)  of  sub-section  (2)  of  section  9,  the  aggrieved  person  may  make  an  application  within 
thirty days from the date of declaration of the result of election to the Secretary of the Institute, who shall 
forward the same to the Central Government. 

10B. Establishment of Tribunal.—(1) On receipt of any application under section 10A, the Central 
Government  shall,  by  notification,  establish  a  Tribunal  consisting  of  a  Presiding  Officer  and  two  other 
Members to decide such dispute and the decision of such Tribunal shall be final. 

(2) A person shall not be qualified for appointment,— 

(a)  as  a  Presiding  Officer  of  the  Tribunal  unless  he  has  been  a  member  of  the  Indian  Legal 

Service and has held a post in Grade I of the service for at least three years; 

1. Subs. by Act 7 of 2006, s. 6, for sub-section (2) (w.e.f. 17-11-2006). 
2. Subs. by Act 12 of 2022, s. 46, for “Register” (w.e.f. 10-5-2022). 
3. Subs. by s. 46, ibid., for “three years” (w.e.f. 10-5-2022). 
4. Subs. by s. 46, ibid., for “six years” (w.e.f. 10-5-2022). 
5. Ins. by Act 7 of 2006,  s. 6 (w.e.f. 17-11-2006). 
6. Subs. by Act 12 of 2022, s. 46, for “person” (w.e.f. 10-5-2022). 
7. Subs. by s. 46, ibid., for “three years” (w.e.f. 10-5-2022). 
8. Subs. by Act 7 of 2006,  s. 7, for section 10 (w.e.f. 17-11-2006). 
9. Ins. by s. 8, ibid. (w.e.f. 17-11-2006). 

8 

 
                                                           
(b) as a Member unless he has been a member of the Council for at least one full term, and who is 

not a sitting member of the Council or who has not been a candidate in the election under dispute; or 

(c) as a Member unless he holds the post of a Joint Secretary to the Government of India or any 
other post under the Central Government carrying a scale of pay which is not less than that of a Joint 
Secretary to the Government of India. 

(3) The terms and conditions of service of the Presiding Officer and Members of the Tribunal, their 

place of meetings and allowances shall be such as may be specified. 

(4) The expenses of the Tribunal shall be borne by the Council.] 

11.  Nomination  in  default  of  election.—If  the  members  of  the  Institute  fail  to  elect  any  member 
under  clause  (a)  of  sub-section  (2)  of  section  9  from  any  of  the  regional  constituencies  that  may  be 
specified under that clause, the Central Government may nominate any duly qualified person from such 
constituency  to  fill  the  vacancy,  and  any  person  so  nominated  shall  be  deemed  to  be  a  duly  elected 
member of the Council. 

12.  President  and  Vice-president.—(1)  The  Council  at  its  first  meeting  shall  elect  two  of  its 
members to be respectively the President and the Vice-President thereof, and so often as the office of the 
President or the Vice-President becomes vacant, the Council shall choose a person to be the President or 
the Vice-President, as the case may be: 

1* 

* 

* 

* 

* 

(2) The President shall be the 2[Head] of the Council. 

3[(2A) The President shall preside at the meetings of the Council. 

(2B) The  President  and the  Vice-President shall exercise such  powers and  perform  such  duties  and 

functions as may be prescribed.  

(2C)  It  shall  be  the  duty  of  the  President  to  ensure  that  the  decisions  taken  by  the  Council  are 

implemented. 

(2D) If, for any reason a vacancy occurs in the office of the President, or if the President is absent or 
for  any  other  reason, is  unable  to  exercise the  powers  or  perform  the duties  assigned  to  him,  the Vice-
President shall act in his place and exercise the powers and perform the duties of the President.] 

(3) The  President or the Vice-President shall  hold office for a  period of  one  year  from  the  date  on 
which he is chosen but so as not to extend beyond his term of office as a member of the Council, and, 
subject  to  his  being  a  member  of  the  Council  at  the  relevant  time,  he  shall  be  eligible  for  re-election 
4[under sub-section (1)]: 

Provided that 5[the President and the Vice-President] of the Council at the time of the expiration of its 
duration shall continue to hold office until a new Council is constituted in accordance with the provisions 
of this Act. 

13. Resignation of membership and casual vacancies.—(1) Any member of the Council may at any 
time  resign  his  membership  by  writing  under  his  hand  addressed  to the  President,  and the  seat  of  such 
member shall become vacant when such resignation is notified in the Official Gazette. 

(2) A member of the Council shall be deemed to have vacated his seat if he is declared by the Council 
to have been absent without sufficient excuse from three consecutive meetings of the Council 6[or he has 
been found guilty of any professional or other misconduct and awarded penalty of fine], or if his name is, 
for any cause, removed from the 7[Register of members] under the provisions of section 20. 

1. The proviso omitted by Act 12 of 2022, s. 47 (w.e.f. 10-5-2022). 
2. Subs. by Act 7 of 2006, s. 7, for “Chief Executive Authority” (w.e.f. 8-8-2006). 
3. Ins. by Act 12 of 2022, s. 47 (w.e.f. 10-5-2022). 
4. Ins. by Act 7 of 2006, s. 9 (w.e.f. 8-8-2006). 
5. Subs. by s. 9, ibid., for “the President” (w.e.f. 8-8-2006). 
6. Ins. by Act 7 of 2006, s. 10,  (w.e.f. 17-11-2006). 
7. Subs. by Act 12 of 2022, s. 48, for “Register” (w.e.f. 10-5-2022). 

9 

 
 
 
 
 
 
 
 
 
                                                           
(3) A casual vacancy in the Council shall be filled by fresh election from the constituency concerned 
or by nomination by the Central Government, as the case may be, and the person elected or nominated to 
fill the vacancy shall hold office until the dissolution of the Council: 

Provided that no election shall be held to fill a casual vacancy occurring within1[one year] prior to the 
date of the expiration of the duration of the Council, but such a vacancy may be filled by the nomination 
by the Central Government after consultation with the President of the Council. 

(4) No act done by the Council shall be called in question on the ground merely of the existence of 

any vacancy in, or defect in the constitution of, the Council. 

14. Duration and dissolution of Council.—(1) The duration of any Council constituted under this 

Act shall be 2[four years] from the date of its first meeting. 

(2) Notwithstanding the expiration of the duration of a Council (hereinafter referred to as the former 
Council), the former Council shall continue to exercise its functions under this Act until a new Council is 
constituted  in  accordance with the  provisions  of  this  Act,  and  on  such  constitution,  the  former  Council 
shall stand dissolved. 

3[15. Functions of Council.—(1) The Institute shall function under the overall control, guidance and 
supervision of the Council and the duty of carrying out the provisions of this Act shall be vested in the 
Council. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  powers,  the  duties  of  the 

Council shall include— 

(a) to approve academic courses and their contents; 

(b) the prescribing of fees for the examination of candidates for enrolment; 

(c) the prescribing of qualifications for entry in the 4[Register of members]; 

(d) the recognition of foreign qualifications and training for the purposes of enrolment; 

(e) the prescribing of guidelines for granting or refusal of certificates of practice under this Act; 

5[(ea) the granting or refusal, of registration of a firm;] 
(f) the levy of fees from members, examinees and other persons; 
(g)  the  regulation  and  maintenance  of  the  status  and  standard  of  professional  qualifications  of 

members of the Institute; 

(h)  the  carrying  out,  by  granting  financial  assistance  to  persons  other  than  members  of  the 

Council or in any other manner, of research in accountancy; 

(i)  to  enable  functioning  of  the  Director  (Discipline),  the  Board  of  Discipline,  the  Disciplinary 

Committee and the Appellate Authority constituted under the provisions of this Act; 

(j) to enable functioning of the Quality Review Board; 
5[(ja) to issue guidelines for the purpose of carrying out the objects of this Act; 
(jb) to conduct investor education and awareness programmes; 
(jc)  to  enter  into  any  memorandum  or  arrangement  with  the  prior  approval  of  the  Central 
Government,  with  any  agency  of  any  foreign  country,  for  the  purpose  of  performing  its  functions 
under this Act;] 

(k) consideration of the recommendations of the Quality Review Board made under clause (a) of 

section 29B 6[and the details of action taken thereon in its annual report]; and 

1. Subs. by Act 7 of 2006, s. 10, for “six months” (w.e.f. 8-8-2006). 
2. Subs. by s. 11, ibid., for “three years” (w.e.f. 22-7-2007). 
3. Subs. by s. 12, ibid., for section 15 (w.e.f. 17-11-2006). 
4. Subs. by Act 12 of 2022, s. 49, for “Register” (w.e.f. 10-5-2022). 
5. Ins. by s. 49, ibid. (w.e.f. 10-5-2022). 
6. Subs. by s. 49, ibid., for “, action taken thereon with a report to the Central Government within a period of three months, and 

their inclusion in the annual report” (w.e.f. 10-5-2022). 

10 

 
                                                           
(l) to ensure the functioning of the Institute in accordance with the provisions of this Act and in 

performance of other statutory duties as may be entrusted to the Institute from time to time]. 

1[15A. Functions of Institute.—The functions of the Institute shall include— 

(a) the examination of candidates for enrolment; 

(b) the regulation of training of students; 

(c)  the  maintenance  and  publication  of  a  Register  of  persons  qualified  to  practice  as  cost 

accountants; 

2[(ca) the maintenance and publication of a Register of firms;] 

(d) collection of fees from members, examinees and other persons; 

(e) subject to the orders of the appropriate authorities under this Act, the removal of names from 
the  3[Register  of  members  and  firms  and  the  restoration  of  names  to  the  Register  of  members  and 
firms] which have been removed; 

(f) the maintenance of a library and publication of books and periodicals relating to accountancy 

and allied subjects; 

(g) the conduct of elections to the Council of the Institute; and 

(h) the granting or refusal of certificates of practice as per guidelines issued by the Council. 

15B. Imparting education by Universities and other bodies.—(1) Subject to the provisions of this 
Act, any University established by law or any body affiliated to the Institute, may impart education on the 
subjects covered by the academic courses of the Institute. 

(2) The Universities or bodies referred to in sub-section (1) shall, while awarding degree, diploma or 
certificate or bestowing any designation, ensure that the award or designation do not resemble or is not 
identical to one awarded by the Institute. 

(3)  Nothing  contained  in  this  section  shall  enable  a  University  or  a  body  to  adopt  a  name  or 

nomenclature which is in any way similar to that of the Institute.] 

4[16.  Officers  and  employees,  salary,  allowances,  etc.—(1)  For  the  efficient  performance  of  its 

duties, the Council shall— 

(a) appoint a Secretary of the Council to perform such duties as may be prescribed; 

(b) appoint a Director (Discipline) to perform such functions as assigned to him under this Act 

and the rules and regulations framed thereunder; 

(c) designate an officer of the Council or the Institute to carry out the administrative functions of 

the Institute as its chief executive. 

(2) The Council may also— 

(a)  appoint  such  other  officers  and  employees  to  the  Council  and  the  Institute  as  it  considers 

necessary; 

(b) require and take from the Secretary or from any other officer or employee of the Council and 

the Institute such security for the due performance of his duties, as the Council considers necessary; 

5[(c) prescribe the manner of appointment, powers, duties and functions of the Secretary and other 

officers and employees, their salaries, fees, allowances and other terms and conditions of service;] 

(d)  with  the  previous  sanction  of  the  Central  Government,  fix  the  allowances  of  the  President, 

Vice-President and other members of the Council and members of its Committees. 

1. Ins. by Act 7 of 2006, s. 13 (w.e.f. 17-11-2006). 
2. Ins. by Act 12 of 2022, s. 50 (w.e.f. 10-5-2022). 
3. Subs. by s. 50, ibid., for “Register and the restoration to the Register of names” (w.e.f. 10-5-2022). 
2. Subs. by Act 7 of 2006, s. 14, for section 16 (w.e.f. 17-11-2006). 
5. Subs. by Act 12 of 2022, s. 51clause (ii), for clause (c) (w.e.f. 10-5-2022). 

11 

 
                                                           
(3)  The  Secretary  of  the  Council  shall  be  entitled  to  participate  in  the  meetings  of  the  Council  but 

shall not be entitled to vote thereat.] 

 17. Committees of the Council.—(1) The Council shall constitute from amongst its members of the 

following Standing Committees, namely:— 

(i) an Executive Committee; 

1[(ii) a Finance Committee; and]; 

(iii) an Examination Committee. 

(2)  The  Council  may  also  form  a  Training  and  Educational  Facilities  Committee  and  such  other 
Committees  from  amongst  its  members  as  it  deems  necessary  for  the  purpose  of  carrying  out  the 
provisions of this Act. 

2[(3) Each of the Standing Committees shall consist of the President and the Vice-President ex officio, 
and  minimum  of  three  and  maximum  of  five  members  to  be  elected  by  the  Council  from  amongst  its 
members]; 

3* 

* 

* 

* 

* 

(6) Notwithstanding anything contained in this section, any Committee formed under sub-section (2), 
may,  with  the  sanction  of  the  Council,  co-opt  such  other  members  of  the  Institute  not  exceeding4[one-
third of total membership of the Committee] as the Committee thinks fit, and any  member so co-opted 
shall be entitled to exercise all the rights of a member of the Committee. 

(7)  The  President  shall  be  the  Chairman  of  every  Committee  of  which  he  is  a  member,  arid  in  his 

absence, the Vice-President, if he is a member of the Committee, shall be the Chairman. 

(8)  The  Standing  Committees  and  other  Committees  formed  under  this  section  shall  exercise  such 

functions and be subject to such conditions in the exercise thereof as may be prescribed. 

18.  Finances  of  the  Council.—(1)  There  shall  be  established  a  fund  under  the  management  and 
control of the Council into which shall be paid all moneys received by the Council and out of which shall 
be met all expenses and liabilities properly incurred by the Council. 

(2) The Council may invest any money for the time being standing to the credit of the fund in any 

Government security or in any other security approved by the Central Government. 

5[(3) The Council shall keep proper accounts of the fund distinguishing capital from revenue in the 

manner prescribed. 

(4) The Council shall prepare in the manner prescribed and approve, prior to the start of the financial 
year,  an  annual  financial  statement  (the  budget)  indicating  all  its  anticipated  revenues  as  well  as  all 
proposed expenditures for the forthcoming year.  

6[(5)The annual accounts of the Council shall be prepared in such manner as may be prescribed and 
subject to audit by a firm of chartered accountants to be appointed annually by the Council from the panel 
of auditors maintained by the Comptroller and Auditor-General of India: 

Provided that a firm shall not be eligible for appointment as an auditor under this sub-section, if any 

of its partner is or has been a member of the Council during the last four years: 

Provided further that in the event it is brought to the notice of the Council that the accounts of the 
Council do not represent a true and fair view of its finances, then, the Council may itself cause a special 
audit to be conducted: 

1. Subs. by Act 7 of 2006, s. 15, for clause (ii) (w.e.f. 17-11-2006). 
2. Subs. by s. 15,ibid., for sub-section (3) (w.e.f. 17-11-2006). 
3. Sub-sections (4) and (5) omitted by s. 15, ibid. (w.e.f. 17-11-2006). 
4. Subs. by s. 15, ibid., for “two-thirds of total membership of the Committee” (w.e.f. 17-11-2006). 
5. Subs. by s. 16, ibid., for sub-sections (3), (4) and (5) (w.e.f. 17-11-2006). 
6. Subs. by Act 12 of 2022, s. 52, for sub-section (5) (w.e.f. 10-5-2022). 

12 

 
 
 
 
 
 
 
 
 
                                                           
Provided also that, if such information, that the accounts of  the Council do not represent a true and 
fair view of its finances, is sent to the Council by the Central Government, then, the Council may, wherever 
appropriate cause a special audit or take such other action as it considers necessary and shall furnish an 
action taken report thereon to the Central Government.] 

1[(5A) As soon as may be practicable at the end of each year, the Council shall circulate the audited 
accounts  to  its  members  at  least  fifteen  days  in  advance  and  consider  and  approve  these  accounts  in  a 
special meeting convened for the purpose. 

(5B) The Council shall cause to be published in the Gazette of India not later than the 30th day of 
September of the year next following, a copy of the audited accounts and the Report of the Council for 
that year duly approved by the Council and copies of the said accounts and Report shall be forwarded to 
the Central Government and to all the members of the Institute.] 

(6)  The  Council  may  borrow  from  a  scheduled  bank  as  defined  in  the  Reserve  Bank  of  India  Act, 

1934 (2 of 1934), or from the Central Government— 

(a) any money required for meeting its liabilities on capital account on the security of the fund or 

on the security of any other assets for the time being belonging to it; or 

(b)  for  the  purpose  of  meeting  current  liabilities  pending  the  receipt  of  income  by  way  of 

temporary loan or overdraft. 

CHAPTER IV 

REGISTER OF MEMBERS 
19. 2[Register of members].—3[(1) The Council shall maintain a Register of members of the Institute in 
such manner as may be prescribed.] 

(2)  The  2[Register  of  members]  shall  include  the  following  particulars  about  every  member  of  the 

Institute,                     namely:— 

(a) his full name, date of birth, domicile, residential and professional addresses; 

(b) the date on which his name is entered in the 2[Register of members]; 

(c) his qualifications; 
4[(ca)  whether  any  actionable  information  or  complaint  is  pending  or  any  penalty  has  been 

imposed against him under Chapter V, including details thereof, if any;] 

(d) whether he holds a certificate of practice; and 

(e) any other particulars which may be prescribed. 

(3) The Council shall cause to be published in such manner as may be prescribed a list of members of 
the Institute as on the 1st day of April of each year, and shall, if requested to do so by any such member, 
send him a copy of such list 5[on payment of such amount as may be prescribed]. 

6[(4) Every member of the Institute shall, on his name being entered in the  2[Register of members], 

pay such annual membership fee as may be determined, by notification, by the Council  7***: 

8* 

* 

* 

* 

*.] 

20. Removal from the 9[Register of members].—(1) The Council may remove from the  9[Register 

of members] the name of any member of the Institute,— 

(a) who is dead; or 

1. Ins. by Act 7 of 2006, s. 16 (w.e.f. 17-11-2006). 
2. Subs. by Act 12 of 2022, s. 53, for “Register” (w.e.f. 10-5-2022). 
3. Subs. by s. 53, ibid., for sub-section (1) (w.e.f. 10-5-2022). 
4. Ins. by s. 53, ibid. (w.e.f. 10-5-2022). 
5. Ins. by Act 7 of 2006, s. 17 (w.e.f. 17-11-20006). 
6. Subs. by s. 17, ibid., for sub-section (4) (w.e.f. 17-11-2006). 
7. The words “, which shall not exceed rupees five thousand” omitted by Act 12 of 2022, s. 53 (w.e.f. 10-5-2022). 
8. The proviso omitted by s. 53, ibid. (w.e.f. 10-5-2022). 
9. Subs. by s. 54, ibid., for “Register” (w.e.f. 10-5-2022). 

13 

 
 
 
 
 
 
 
 
 
                                                           
(b) from whom a request has been received to that effect; or 

(c) who has not paid any prescribed fee required to be paid by him; or 

(d) who is found to have been subject at the time when his name was entered in the  1[Register of 
members], or who at any time thereafter has become subject, to any of the disabilities mentioned in 
section  8,  or  who  for  any  other  reason  has  ceased  to  be  entitled  to  have  his  name  borne  on  the 
Register. 

(2) The Council shall remove from the 1[Register of members] the name of any member in respect of 

whom an order has been passed under this Act removing him from membership of the Institute. 

2[(3) If the name of any member has been removed from the Register under clause (c) of sub-section 
(1), on receipt of an application, his name may be entered again in the Register on payment of the arrears 
of annual fee and entrance fee along with such additional fee, as may be determined, by notification, by 
the Council 3***: 

4* 

* 

* 

* 

*.] 

CHAPTER V 

  MISCONDUCT 

5[21.  Disciplinary  Directorate.—(1)  The  Council  shall,  by  notification,  establish  a  Disciplinary 
Directorate  headed  by  an  officer  of  the  Institute  designated  as  Director  (Discipline)  and  such  other 
employees for making investigations in respect of any information or complaint received by it. 

(2) On receipt of any information or complaint along with the prescribed fee, the Director (Discipline) 

shall arrive at a prima facie opinion on the occurrence of the alleged misconduct. 

(3) Where the Director (Discipline) is of the opinion that a member is guilty of any professional or 
other misconduct mentioned in the First Schedule, he shall place the matter before the Board of Discipline 
and where the Director (Discipline) is of the opinion that a member is guilty of any professional or other 
misconduct mentioned in the Second Schedule or in both the Schedules, he shall place the matter before 
the Disciplinary Committee. 

(4) In order to make investigations under the provisions of this Act, the Disciplinary Directorate shall 

follow such procedure as may be specified. 

(5)  Where  a  complainant  withdraws  the  complaint,  the  Director  (Discipline)  shall  place  such 
withdrawal  before  the  Board  of  Discipline  or  as  the  case  may  be,  the  Disciplinary  Committee,  and  the 
said Board of Committee may, if it is of the view that the circumstances so warrant, permit the withdrawal 
at any stage.] 

6[21A. Board of Discipline.—(1) The Council shall constitute a Board of Discipline consisting of— 

(a)  a  person  with  experience  in  law  and  having  knowledge  of  disciplinary  matters  and  the 

profession, to be its presiding officer; 

(b) two members one of whom shall be a member of the Council elected by the Council and the 

other member shall be the person designated under clause (c) of sub-section (1) of section 16; 

(c) the Director (Discipline) shall function as the Secretary of the Board. 

(2)  The  Board  of  Discipline  shall  follow  summary  disposal  procedure  in  dealing  with  all  the  cases 

before it. 

(3) Where the Board of Discipline is of the opinion that a member is guilty of a professional or other 
misconduct mentioned in the First Schedule, it shall afford to the member an opportunity of being heard 

1. Subs. by Act 12 of 2022, s. 54, for “Register” (w.e.f. 10-5-2022). 
2. Ins. by Act 7 of 2006, s. 18 (w.e.f. 17-11-2006). 
3. The words “which shall not exceed rupees two thousand” omitted by Act 12 of 2022, s. 54 (w.e.f. 10-5-2022). 
4. The proviso omitted by s. 54, ibid. (w.e.f. 10-5-2022). 
5. Subs. by Act 7 of 2006, s. 19, for section 21 (w.e.f. 17-11-2006). 
6. Ins. by s. 20, ibid. (w.e.f. 17-11-2006). 

14 

 
 
 
 
 
 
 
 
 
 
                                                           
before making any order against him and may thereafter take any one or more of the following actions, 
namely:— 

(a) reprimand the member; 

(b) remove the name of the member from the Register up to a period of three months; 

(c) impose such fine as it may think fit which may extend to rupees one lakh. 

(4)  The  Director  (Discipline)  shall  submit  before  the  Board  of  Discipline  all  information  and 
complaints where he is of the opinion that there is no prima facie case and the Board of Discipline may, if 
it agrees with the opinion of the Director (Discipline), close the matter or in case of disagreement, may 
advise the Director (Discipline) to further investigate the matter. 

21B.  Disciplinary  Committee.—(1)  The  Council  shall  constitute  a  Disciplinary  Committee 
consisting of the President or the Vice-President of the Council as the Presiding Officer and two members 
to be elected from amongst the members of the Council and two members to be nominated by the Central 
Government  from  amongst  the  persons  of  eminence  having  experience  in  the  field  of  law,  economics, 
business, finance or accountancy: 

Provided  that  the  Council  may  constitute  more  Disciplinary  Committees  as  and  when  it  considers 

necessary. 

(2)  The  Disciplinary  Committee  while  considering  the  cases  placed  before  it,  shall  follow  such 

procedure as may be specified. 

(3) Where the Disciplinary Committee is of the opinion that a member is guilty of a professional or 
other misconduct mentioned in the Second Schedule or both the First Schedule and the Second Schedule, 
it shall afford to the member an opportunity of being heard before making any order against him and may 
thereafter take any one or more of the following actions, namely:— 

(a) reprimand the member; 

(b) remove the name of the member from the Register permanently or for such period, as it thinks 

fit; 

(c) impose such fine as it may think fit, which may extend to rupees five lakhs. 

(4) The allowances payable to the members nominated by the Central Government shall be such as 

may be specified. 

21C. Authority, Disciplinary Committee, Board of Discipline and Director (Discipline) to have 
powers of civil court.—For the purposes of an inquiry under the provisions of this Act, the Authority, 
the Disciplinary Committee, Board of Discipline and the Director (Discipline) shall have the same powers 
as  are  vested  in  a  civil  court  under  the  Code  of  Civil  Procedure,  1908(5  of  1908),  in  respect  of  the 
following matters, namely:— 

(a) summoning and enforcing the attendance of any person and examining him on oath; 

(b) the discovery and production of any document; and 

(c) receiving evidence on affidavit. 

1* 

* 

* 

* 

*. 

21D.Transitional  provisions.—All  complaints  pending  before  the  Council  or  any  inquiry  initiated 
by  the  Disciplinary  Committee  or  any  reference  or  appeal  made  to  a  High  Court  prior  to  the 
commencement  of  the  Cost  and  Works  Accountants  (Amendment)  Act,  2006  shall  continue  to  be 

1. The Explanation omitted by Act 12 of 2022, s. 59 (w.e.f. 10-5-2022). 

15 

 
 
 
 
 
 
 
 
 
                                                           
governed  by  the  provisions  of  this  Act,  as  if  this  Act  had  not  been  amended  by  the  Cost  and  Works 
Accountants (Amendment) Act, 2006.] 

1[22.  Professional  or  other  misconduct  defined.—For  the  purposes  of  this  Act,  the  expression 
“professional or other misconduct” shall be deemed to include any act or omission provided in any of the 
Schedules  but  nothing  in  this  section  shall  be  construed  to  limit  or  abridge  in  any  way  the  power 
conferred or duty cast on the Director (Discipline) under sub-section (1) of section 21 to inquire into the 
conduct of any member of the Institute under any other circumstances.] 

2[22A.  Constitution  of  Appellate  Authority.—The  Appellate  Authority  constituted  under  sub-
section (1) of section 22A of the Chartered Accountants Act, 1949(38 of 1949), shall be deemed to be the 
Appellate Authority for the purposes of this Act subject to the modification that for clause (b) of said sub-
section (1), the following clause had been substituted, namely:— 

“(b) the Central Government shall, by notification appoint two part-time members from amongst 
the persons who have been members of the Council of the 3[Institute of Cost Accountants of India] 
for at least one full term and who is not a sitting member of the Council;”. 

22B. Term of office of members of Authority.—A person appointed as a member shall hold office 
for a term of three years from the date on which he enters upon his office or until he attains the age of 
sixty-two years, whichever is earlier. 

22C. Procedure, etc., of Authority.—The provisions of section 22C, section 22D and section 22F of 
the Chartered Accountants Act, 1949(38 of 1949) shall apply to the Authority in relation to allowances 
and terms and conditions of service of its Chairperson and members and in the discharge of its functions 
under this Act as they apply to it in the discharge of its functions under the Chartered Accountants Act, 
1949. 

22D. Officers and other staff of Authority.—(1) The Council shall make available to the Authority 
such officers and other staff members as may be necessary for the efficient performance of the functions 
of the Authority. 

(2) The salaries and allowances and conditions of service of the officers and other staff members of 

the Authority shall be such as may be prescribed. 

22E. Appeal to Authority.—(1) Any member of the Institute aggrieved by any order of the Board of 
Discipline or the Disciplinary Committee imposing on him any of the penalties referred to in sub-section 
(3) of section 21A and sub-section (3) of section 21B, may within ninety days from the date on which the 
order is communicated to him, prefer an appeal to the Authority: 

Provided  that  the  Director  (Discipline)  may  also  appeal  against  the  decision  of  the  Board  of 
Discipline or the Disciplinary Committee to the Authority if so authorised by the Council, within ninety 
days: 

Provided further that the Authority may entertain any such appeal after the expiry of the said period 

of ninety days, if it is satisfied that there was sufficient cause for not filing the appeal in time. 

(2) The Authority may, after calling for the records of any case, revise any order made by the Board 
of Discipline or the Disciplinary Committee under sub-section (3) of section 21A and sub-section (3) of 
section 21B and may— 

(a) confirm, modify or set aside the order; 

(b) impose any penalty or set aside, reduce, or enhance the penalty imposed by the order; 

(c) remit the case to the Board of Discipline or Disciplinary Committee for such further enquiry 

as the Authority considers proper in the circumstances of the case; or 

(d) pass such other order as the Authority thinks fit: 

1. Subs. by Act 7 of 2006, s. 21, for section 22 (w.e.f. 17-11-2006). 
2. Ins. by s. 22, ibid. (w.e.f. 17-11-2006). 
3. Subs. by s. 5, ibid., for “Institute of Cost and Works Accountants of India” (w.e.f. 17-11-2006). 

16 

 
                                                           
Provided that the Authority shall give an opportunity of being heard to the parties concerned before 

passing any order.] 

CHAPTER VI 

REGIONAL COUNCILS 

23.  Constitution  and  functions  of  Regional  Councils.—(1)  For  the  purpose  of  advising  and 
assisting it on matters concerning its functions, the Council may constitute such Regional Councils as and 
when  it  deems  fit  for  one  or  more  of  the  regional  constituencies  that  may  be  specified  by  the  Central 
Government under clause (a) of sub-section (2) of section 9. 

(2) The Regional Councils shall be constituted in such manner and exercise such functions as may be 

prescribed. 

CHAPTER VII 

PENALTIES 

24. Penalty for falsely claiming to be a member, etc.—Any person who,— 

(i) not being a member of the Institute— 

(a) represents that he is a member of the Institute; or 

(b) uses the designation cost accountant; or 

(ii) being a member of the Institute, but not having a certificate of practice, represents that he is in 

practice or practices as a cost accountant; 

shall  be  punishable  on  first  conviction  with  fine  which  may  extend  to  1[one  lakh  rupees],  and  on  any 
subsequent  conviction  with  imprisonment  which  may  extend  to  six  months,  or  with  fine  which  may 
extend to 2[five lakh rupees], or with both. 

25. Penalty for using name of the Council, awarding degrees of cost accountancy, etc.—(1) Save 

as otherwise provided in this Act, no person shall,— 

(i)  use  a  name  or  a  common  seal  which  is  identical  with  the  name  or  the  common  seal  of  the 

Institute or so nearly resembles it as to deceive or as is likely to deceive the public; 

(ii)  award  any  degree,  diploma  or  certificate  or  bestow  any  designation  which  indicates  or 
purports to indicate the position or attainment of any qualification or competence in cost accountancy 
similar to that of a member of the Institute; or 

(iii) seek to regulate in any manner whatsoever the profession of 3[cost accountants]. 

(2)  Any  person  contravening  the  provisions  of  sub-section (1)  shall,  without  prejudice  to  any  other 
proceedings which may be taken against him, 4[be punishable with imprisonment which may extend to six 
months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees 
or with both on first conviction], and on any subsequent conviction with imprisonment which may extend 
to 5[one year, or with fine which shall not be less than two lakh rupees but which may extend to ten lakh 
rupees], or with both. 

6* 

* 

* 

* 

* 

(4) If the Central Government is satisfied that any diploma or certificate or any designation granted or 
conferred by any person other than the Institute, which purports to be a qualification in cost accountancy 
but  which,  in  the  opinion  of  the  Central  Government,  falls  short  of  the  standard  of  qualifications 
prescribed  for  cost  accountants  and  does  not  in  fact  indicate  or  purport  to  indicate  the  position  or 

1. Subs. by Act 12 of 2022, s. 63, for “one thousand rupees” (w.e.f. 10-5-2022). 
2. Subs. by s. 63, ibid., for “five thousand rupees” (w.e.f. 10-5-2022). 
3. Subs. by Act 10 of 2012, s. 6, for “cost and works accountants” (w.e.f. 1-2-2012). 
4. Subs. by Act 12 of 2022, s. 64, for “be punishable on first conviction with fine which may extend to one thousand rupees” 

(w.e.f. 10-5-2022). 

5. Subs. by s. 64, ibid., for “six months, or with fine which may extend to five thousand rupees” (w.e.f. 10-5-2022). 
6. Sub-section (3) omitted by Act 7 of 2006, s. 23 (w.e.f. 8-8-2006). 

17 

 
 
 
 
 
 
 
 
 
                                                           
attainment  of  any  qualification  or  competence  in  cost  accountancy  similar  to  that  of  a  member  of  the 
Institute, it may, by notification in the Official Gazette and subject to such conditions as it may think fit to 
impose, declare that this section shall not apply to such diploma or certificate or designation. 

26.  Companies  not  to  engage  in  cost  accountancy.—(1)  No  company,  whether  incorporated  in 

India or elsewhere, shall practice as cost accountants. 

1[Explanation.—For the removal of doubts, it is hereby declared that the “company” shall include any 

limited liability partnership which has company as its partner for the purposes of this section.] 

2[(2)  If  any  company  contravenes  the  provisions  of  sub-section  (1),  then  every  director,  manager, 
Secretary and any other officer who is knowingly a party to such contravention shall be punished on first 
conviction  with  fine  which  shall  not  be  less  than  two  lakh  rupees  but  which  may  extend  to  ten  lakh 
rupees,  and  on  any  subsequent  conviction,  with  fine  which  shall  not  be  less  than  four  lakh  rupees  but 
which may extend to twenty lakh rupees.] 

27.  Unqualified  persons  not  to  sign  documents.—(1)  No  person  other  than  a  member  of  the 
Institute  shall  sign  any  document  on  behalf  of  cost  accountant  in  practice  or  a  firm  of  such  cost 
accountants in his or its professional capacity. 

3[(2)  Any  person  who  contravenes  the  provisions  of  sub-section  (1)  shall,  without  prejudice  to  any 
other proceedings which may be taken against him, be punishable on first conviction with a fine not less 
than  4[one  lakh  rupees]  but  which  may  extend  to  5[five  lakh  rupees],  and  in  the  event  of  a  second  or 
subsequent conviction with imprisonment for a term which may extend to one year or with a fine not less 
than 6[two lakh rupees] but which may extend to 7[ten lakh rupees] or with both.] 

28. Offences by companies.—(1) If the person committing an offence under this Act is a company, 
the company as well as every person in charge of, and responsible to, the company for the conduct of its 
business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall 
be liable to be proceeded against and punished accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment if he proves that the offence was committed without his knowledge or that he exercised all 
due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance  of,  or  that  the  commission  of  the  offence  is  attributable  to  any  neglect  on  the  part  of,  any 
director,  manager, secretary  or  other  officer  of  the  company,  such  director,  manager,  secretary  or other 
officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and 
punished accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” with respect to any offence under section 24, section 25 or section 27, means any 
body corporate and includes a firm or other association of individuals; and with respect to an offence 
under section 26 means a body corporate; and 

(b) “director”, in relation to a firm, means a partner in the firm. 

29.  Sanction  to  prosecute.—No  person  shall  be  prosecuted  under  this  Act  except  on  a  complaint 

made by or under the order of the Council or of the Central Government. 

1. Ins. by Act 10 of 2012, s. 7 (w.e.f. 1-2-2012). 
2. Subs. by Act 12 of 2022, s. 65, for sub-section (2) (w.e.f. 10-5-2022). 
3. Subs. by Act 7 of 2006, s. 24, for sub-section (2) (w.e.f. 17-11-2006). 
4. Subs. by Act 12 of 2022, s. 66, for “five thousand rupees” (w.e.f. 10-5-2022). 
5. Subs. by s. 66, ibid., for “ one lakh rupees” (w.e.f. 10-5-2022). 
6. Subs. by s. 66, ibid., for “ten thousand rupees” (w.e.f. 10-5-2022). 
7. Subs. by s. 66, ibid., for “ two lakh rupees” (w.e.f. 10-5-2022). 

18 

 
 
 
                                                           
 
1[CHAPTER VIIA 

QUALITY REVIEW BOARD 

29A. Establishment of Quality Review Board.—(1) The Central Government shall, by notification, 

constitute a Quality Review Board consisting of a Chairperson and four other members. 

(2)  The  Chairperson  and  members  of  the  Board  shall  be  appointed  from  amongst  the  persons  of 

eminence having experience in the field of law, economics, business, finance or accountancy. 

(3) Two members of the Board shall be nominated by the Council and other two members shall be 

nominated by the Central Government. 

29B. Functions of Board.—The Board shall perform the following functions, namely:— 

(a) to make recommendations to the Council with regard to the quality of services provided by 

the members of the Institute; 

(b) to review the quality of services provided by the members of the Institute including cost audit 

services; and 

(c) to guide the members of the Institute to improve the quality of services and adherence to the 

various statutory and other regulatory requirements. 

2[(d) to forward cases of non-compliance with various statutory and regulatory requirements by 
the members of the Institute or firms noticed by it during the course of its review, to the Disciplinary 
Directorate for its examination.] 

29C. Procedure of Board.—The Board shall meet at such time and place and follow in its meetings 

such procedure as may be specified. 

29D.  Terms  and  conditions  of  service  of  Chairperson  and  members  of  Board  and  its 
expenditure.—(1) The terms and conditions of service of the Chairperson and the members of the Board, 
and their allowances shall be such as may be specified. 

(2) The expenditure of the Board shall be borne by the Council.] 

CHAPTER VIII 

DISSSOLUTION OF THE INSTITUTE OF COST AND WORKS ACCOUNTANTS REGISTERED UNDER THE 
COMPANIES ACT, 1956 (1 OF 1956) 

30. Dissolution of the Institute of Cost and Works Accountants registered under the Companies 

Act, 1956.—On the commencement of this Act,— 

(a)  the  company  known  as  the  Institute  of  Cost  and  Works  Accountants  registered  under  the 
Companies Act, 1956(1 of 1956), shall be dissolved and thereafter no person shall make, assert or take 
any claims, demands or proceedings against the dissolved company or against any officer thereof in 
his capacity as such officer except in so far as may be necessary, for enforcing the provisions of this 
Act; 

(b) the right of every member to or in respect of the dissolved company shall be extinguished, and 
thereafter  no  member  of  that  company  shall  make,  assert  or  take  any  claims  or  demands  or 
proceedings in respect of that company except as provided in this Act. 

31.  Transfer  of  assets  and  liabilities  of  the  dissolved  company  to  the  Institute.—(1)  On  the 
commencement  of  this  Act,  there  shall  be  transferred  to  and  vested  in  the  Institute  all  the  assets  and 
liabilities of the dissolved company. 

(2)  The  assets  of  the  dissolved  company  shall  be  deemed  to  include  all  rights  and  powers,  and  all 
property, whether movable or immovable of the company, including, in particular, cash balances, reserve 
funds, investments, deposits and all other interests and rights in or arising out of such property as may be 
in  the  possession  of  the  dissolved  company  and  all  books  of  accounts  or  documents  of  the  dissolved 

1. Ins. by Act 7 of 2006, s. 25 (w.e.f. 17-11-2006). 
2. Ins. by Act 12 of 2022, s. 67 (w.e.f. 10-5-2022). 

19 

 
                                                           
company; and the liabilities shall be deemed to include all debts, liabilities and obligations of whatever 
kind then existing of that company. 

(3)  All  contracts,  debts,  bonds,  agreements  and  other  instruments  of  whatever  nature  to  which  the 
dissolved company is a party, subsisting or having effect immediately before the commencement of this 
Act, shall be of as full force and effect against or in favour of the Institute, as the case may be, and may be 
enforced  as  fully  and  effectively  as  if  instead  of  the  dissolved  company,  the  Institute  had  been  a  party 
thereto. 

(4) If, on the commencement of this Act, any suit, appeal or other legal proceeding of whatever nature 
by or against the dissolved company is pending, the same shall not abate, be discontinued or be in any 
way  prejudicially  affected  by  reason  of  the  transfer  to  the  Institute  of  the  assets  and  liabilities  of  the 
dissolved company or of anything contained in this Act, but the suit, appeal or other proceeding may be 
continued, prosecuted and enforced by or against the Institute, in the same manner and to the same extent 
as it would or may be continued, prosecuted and enforced by or against the dissolved company if this Act 
had not been passed. 

32. Provisions respecting employees of the dissolved company.—(1) Every person employed in the 
dissolved  company  prior  to  the  1st  day  of  September,  1958,  and  still  in  its  employment  immediately 
before  the  commencement  of  this  Act  shall,  as  from  such  commencement,  become  an  employee  of  the 
Institute,  shall  hold  his  office  or  service  therein  by  the  same  tenure  and  upon  the  same  terms  and 
conditions and with the same rights and privileges as to pension and gratuity as he would have held the 
same under the dissolved company if this Act had not been passed, and shall continue to do so unless and 
until  his  employment  in  the  Institute  is  terminated  or  until  his  remuneration,  terms  and  conditions  of 
employment are duly altered by the Institute. 

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any 
other  law  for  the  time  being  in  force  the  transfer  of  the  services  of  any  employee  of  the  dissolved 
company to the Institute shall not entitle any such employee to any compensation under that Act or other 
law, and no such claim shall be entertained by any court, tribunal or other authority. 

CHAPTER IX 

MISCELLANEOUS 

33.  [Appeals.]  Omitted  by  Cost  and  Works  (Amendment)  Act,  2006  (7  of  2006),  s.  26                      

(w.e.f. 17-11-2006).  

1[34. Coordination Committee.—The Coordination Committee constituted under  section 9A of the 
Chartered Accountants Act, 1949 (38 of 1949), shall be deemed to be the Coordination Committee for the 
purposes of this Act.] 

35. Directions of the Central Government.—(1) The Central Government may from time to time 
issue  such  directions  to  the  Council  as  in  the  opinion  of  the  Central  Government  are  conducive  to  the 
fulfilment of the objects of this Act and in the discharge of its functions, the Council shall be bound to 
carry out any such directions. 

(2)  Directions  issued  under  sub-section  (1)  may  include  directions  to  the  Council  to  make  any 

regulations or to amend or revoke any regulations already made. 

(3) If, in the opinion of the Central Government the Council has persistently made default in giving 
effect to the directions issued under this section, the Central Government may, after giving an opportunity 
to  the  Council  to  state  its  case,  by  order,  dissolve  the  Council,  where  after  a  new  Council  shall  be 
constituted in accordance with the provisions of this Act with effect from such date as may be specified 
by the Central Government. 

(4) Where the  Central  Government  passes  an  order under sub-section (3) dissolving  the  Council,  it 
may, pending the constitution of a new Council in accordance with the provisions of this Act, authorise 
any person or body of persons to take over the management of the affairs of the Institute and to exercise 
such functions as may be specified in this behalf by the Central Government. 

1. Subs. by Act 12 of 2022, s. 68, for section 34 (w.e.f. 10-5-2022). 

20 

 
                                                           
1[36. Protection of action taken in good faith.—No suit, prosecution or other legal proceeding shall 
lie against the Central Government or the Council or the Authority or the Disciplinary Committee or the 
Tribunal  or  the  Board  or  the  Board  of  Discipline  or  the  Disciplinary  Directorate  or  any  officer  of  that 
Government,  Council,  Authority,  Disciplinary  Committee,  Tribunal,  Board,  Board  of  Discipline  or  the 
Disciplinary Directorate, for anything which is in good faith done or intended to be done under this Act or 
any rule, regulation, notification, direction or order made thereunder.] 

2[36A.  Members,  etc.,  to  be  public  servants.—The  Chairperson,  Presiding  Officer,  members  and 
other  officers  and  employees  of  the  Authority,  Disciplinary  Committee,  Tribunal,  Board,  Board  of 
Discipline  or  the  Disciplinary  Directorate  shall  be  deemed  to  be  public  servants  within the  meaning  of 
section 21 of the Indian Penal Code(45 of 1860).] 

 37. Maintenance of branch offices.—(1) Where a cost accountant in practice or a firm of such cost 
accountants has more than one office in India, each one of such offices shall be in the separate charge of a 
member of the Institute: 

Provided  that  the  Council  may  in  suitable  cases  exempt  any  cost  accountant  in  practice  or  firm  of 

such cost accountants from the operation of this sub-section. 

(2)  Every  cost  accountant  in  practice  or  firm  of  such  cost  accountants  maintaining  more  than  one 
office  shall  send  to  the  Council  a  list  of  offices  and  the  persons  in  charge  thereof  and  shall  keep  the 
Council informed of any changes in relation thereto. 

38.  Reciprocity.—(1)  Where  any  country,  specified  by  the  Central  Government  in  this  behalf  by 
notification in the Official Gazette, prevents persons of Indian domicile from becoming members of any 
institution  similar  to  the  Institute  established  under  this  Act  or  from  practicing  the  profession  of  costs 
accountancy or subject them to unfair discrimination in that country, no subject of any such country shall 
be entitled to become a member of the Institute or practice the profession of cost accountancy, in India. 

(2)  Subject  to  the  provisions  of  sub-section  (1),  the  Council  may  prescribe  the  conditions,  if  any, 
subject to which foreign qualifications relating to cost accountancy shall be recognised for the purposes of 
entry in the 3[Register of members]. 

4[38A.  Power  of  Central  Government  to  make  rules.—(1)  The  Central  Government  may,  by 

notification, make rules to carry out the provisions of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  powers,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a) the manner of election and nomination in respect of members to the Council under sub-section 

(2) of section 9; 

(b)  the  terms  and  conditions  of  service  of  the  Presiding  Officer  and  Members  of  the  Tribunal, 

place of meetings and allowances to be paid to them under sub-section (5) of section 10B; 

5[(c) the form and fee for filing an information or a complaint under sub-section (1), the manner 
of deciding a complaint or information as actionable or non-actionable under sub-section (2) and the 
procedure of investigation under sub-section (7), of section 21; 

(d)  the  procedure  while  considering  the  cases  by  the Board  of  Discipline under  sub-section (2) 

and time limit for payment of fine under sub-section (7), of section 21A; 

(da)  the  procedure  while  considering  the  cases  by  the  Disciplinary  Committee  under                       

sub-section (2) and time limit for payment of fine under sub-section (7), of section 21B;] 

(e) the procedure to be followed by the Board in its meetings under section 29C; and 

1. Subs. by Act 7 of 2006, s. 27, for section 36 (w.e.f. 17-11-2006). 
2. Ins. by s. 28, ibid. (w.e.f. 17-11-2006). 
3. Subs. by Act 12 of 2022, s. 69, for “Register” (w.e.f. 10-5-2022). 
4. Ins. by Act 7 of 2006, s. 29 (w.e.f. 17-11-2006). 
5. Subs. by Act 12 of 2022, s. 70, for clauses (c) and (d) (w.e.f. 10-5-2022). 

21 

 
                                                           
(f) the terms and conditions of service of the Chairperson and members of the Board under sub-

section (1) of section 29D.] 

 39.  Power  to  make  regulations.—(1)  The  Council  may,  by  notification  in  the  Gazette  of  India, 

make regulations for the purpose of carrying out the objects of this Act, 1***. 

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may 

provide for all or any of the following matters, namely:— 

(a) the standard and conduct of examinations under this Act; 

(b) the qualifications for the entry of the name of any person in the  2[Register of members] as a 

member of the Institute; 

(c) the qualification required for the purposes of sub-section (4) of section 5; 

(d) the conditions under which any examination or training  may be treated as equivalent to the 

examination or training prescribed for members of the Institute; 

(e) the conditions under which any foreign qualification may be recognised; 

(f)  the  manner  in  which  and  the  conditions  subject  to  which  applications  for  entry  in  the 

2[Register of members] may be made; 

(g) the fees payable for membership of the Institute and the annual fees payable by associates and 

fellows of the Institute in respect of their certificates; 

 3* 

* 

* 

(i) the particulars to be entered in the 2[Register of members]; 

4* 

* 

* 

* 

* 

* 

* 

(k)  the  regulation  and  maintenance  of  the  status  and  standard  of  professional  qualifications  of 

members of the Institute; 

(l) the carrying out of research in accountancy; 

(m)  the  maintenance  of  libraries  and  publication  of  books  and  periodicals  relating  to  cost 

accountancy and allied subjects; 

(n) the management of the property of the Council and the maintenance and audit of its accounts; 

(o) the summoning and holding of meetings of the Council and committees thereof, the times and 
places of such meetings, the procedure to be followed thereat and the number of members necessary 
to form a quorum; 

(p) the manner in which the annual list of 5[members and firms registered with] the Institute shall 

be published; 

(q) the powers, duties and functions of the President and the Vice-President of the Council; 

(r) the functions of the Standing and other committees and the conditions subject to which such 

functions shall be discharged; 

6[(s)  the  circumstances  under  which  certificates  of  practice  may  be  cancelled  under                   

sub-section (3) of section 6;  

(sa)  the  guidelines  for  granting  or  refusal  of  certificates  of  practice  under  clause  (e)  of                       

sub-section (2) of section 15; 

1.  The  words  “and  a  copy  of  such  regulations  shall  be  sent  to  each  member  of  the  Institute”  omitted  by  Act  7  of  2006,  s.  30 

(w.e.f. 17-11-2006). 

2.  Subs. by Act 12 of 2022, s. 71, for “Register” (w.e.f. 10-5-2022). 
3. Clause (h) omitted by s. 71,  ibid. (w.e.f. 10-5-2022). 
4. Clause (j) omitted by s. 71,  ibid. (w.e.f. 10-5-2022). 
5. Subs. by s. 71, ibid., for “members of” (w.e.f. 10-5-2022). 
6. Subs. by s. 71, ibid., for clause (s) (w.e.f. 10-5-2022). 

22 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
(sb)  the  manner  of  appointment,  powers,  duties,  functions,  salaries,  fees,  allowances  and  other 
terms  and  conditions  of  service  of  the  Secretary  and  other  officers  and  employees  of  the  Council 
under clause (c) of sub-section (2) of section 16; 

(sc)  the  manner  of  preparing  annual  financial  statement  under  sub-section  (4)  and  the  annual 

accounts under sub-section (5), of section 18; 

(sd) the manner of maintaining a Register of the members of the Institute under sub-section (1) of 

section 19; 

(se)  the  manner  of  making  an  application  for  grant  of  registration  of  a  firm  and  the  terms  and 

conditions of such registration under section 20A; 

(sf)  the  manner  of  maintenance  of  Register  of  firms  and  other  particulars  including  details  of 
pendency  of  any  actionable  information  or complaint  or  imposition  of any  penalty  against  the  firm 
under sub-section (1) and sub-section (2) and the manner in which the annual list of firms registered 
with the Institute shall be published under sub-section (3), of section 20B; 

(sg) the manner of making available status of actionable information and complaints and orders 

passed under sub-section (9) of section 21; 

(sh) the manner of preparing panel of persons under clauses (a), (b) and (c) of sub-section (1) and 

the  allowances  payable  to  the  Presiding  Officers  and  members  of  Board  of  Discipline  under            
sub-section (8), of section 21A; 

(si) the manner of preparing panel of persons under clauses (a), (b) and (c) of sub-section (1) and 
the allowances payable to the Presiding Officers and members of the Disciplinary Committees under 
sub-section (8), of section 21B; 

(sj)  the  salaries  and  allowances  and  conditions  of  service  of  officers  and  other  staff  of  the 

Authority under sub-section (2) of section 22D; 

(sk) the manner in which Regional Council may be constituted under sub-section (2) of section 23 

and the functions thereof;] 

1* 

* 

* 

* 

* 

(u) the terms and conditions of service of persons who have become employees of the Institute 

under section 32 of this Act; 

(v) the registration and training of students and the fees to be charged therefor; and 
(w) any other matter which is required to be, or may be, prescribed under this Act. 

(3) All regulations made by the Council under this Act shall  be subject to the condition of previous 

publication and to the approval of the Central Government. 

(4)  Notwithstanding  anything  contained  in  sub-sections  (1)  and  (2),  the  Central  Government  may 
frame  the  first  regulations  for  the  purposes  mentioned  in  this  section,  and  such  regulations  shall  be 
deemed to have been made by the Council, and shall remain in force until they are amended, altered or 
revoked by the Council. 

* 

* 

1* 
2[40.  Rules,  regulations  and  notifications  to  laid  before  Parliament.—Every  rule  and  every 
regulation made and every notification issued under this Act shall be laid, as soon as may be after it is 
made or issued, before each House of Parliament, while it is in session, for a total period of thirty days 
which may be comprised in one session or in two or more successive sessions, and if, before the expiry of 
the session immediately following the session or the successive sessions aforesaid, both Houses agree in 
making  any  modification  in  the  rule,  regulation  or  notification,  or  both  Houses  agree  that  the  rule, 
regulation or notification should not be made or issued, the rule, regulation or notification shall thereafter 
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such 

* 

* 

1. Clause (t) omitted by Act 7 of 2006, s. 30 (w.e.f. 17-11-2006). 
2. Ins. by s. 31, ibid. (w.e.f. 17-11-2006). 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
modification or annulment shall be without prejudice to the validity of anything previously done under 
that rule, regulation or notification.] 

THE FIRST SCHEDULE 

[See sections 21 (3),21A(3) and 22] 

PART I 

Professional misconduct in relation to cost accountants in practice 

A cost accountant in practice shall be deemed to be guilty of professional misconduct, if he— 

(1) allows any person to practice in his name as a cost accountant unless such person is also a cost 

accountant in practice and is in partnership with or employed by him; 

(2)  pays  or  allows  or  agrees  to  pay  or  allow,  directly  or  indirectly,  any  share,  commission  or 
brokerage  in  the  fees  or  profits  of  his  professional  business,  to  any  person  other  than  a  member  of  the 
Institute or a partner or a retired partner or the legal representative of a deceased partner, or a member of 
any other professional body or with such other persons having such qualifications as may be prescribed, 
for the purpose of rendering such professional services from time to time in or outside India. 

Explanation.—In  this  item,  “partner”  includes  a  person  residing  outside  India  with  whom  a  cost 

accountant in practice has entered into partnership which is not in contravention of item (4) of this Part; 

(3) accepts or agrees to accept any part of the profits of the professional work of a person who is not a 

member of the Institute: 

Provided that nothing herein contained shall be construed as prohibiting a member from entering into 
profit sharing or other similar arrangements, including receiving any share, commission or brokerage in 
the fees, with a member of such professional body or other person having qualifications, as is referred to 
in item (2) of this Part; 

(4) enters into partnership, in or outside India, with any person other than a cost accountant in practice 
or such other person who is a member of any other professional body having such qualifications as may 
be prescribed, including a resident who but for his residence abroad would be entitled to be registered as a 
member  under  clause  (iv) of  sub-section  (1)  of section  4  or  whose  qualifications  are recognised  by  the 
Central Government or the Council for the purpose of permitting such partnerships; 

(5) secures, either through the services of a person who is not an employee of such cost accountant or 

who is not his partner or by means which are not open to a cost accountant, any professional business: 

Provided that nothing herein contained shall be construed as prohibiting any arrangement permitted in 

terms of items (2), (3) and (4) of this Part; 

(6)  solicits  clients  or  professional  work,  either  directly  or  indirectly,  by  circular,  advertisement, 

personal communication or interview or by any other means: 

Provided that nothing herein contained shall be construed as preventing or prohibiting— 

(i) any cost accountant from applying or requesting for or inviting or securing professional work 

from another cost accountant in practice; or 

(ii)  a  member  from  responding  to  tenders  or  enquiries  issued  by  various  users  of  professional 

services or organisations from time to time and securing professional work as a consequence; 

(7)  advertises his  professional attainments  or services,  or  uses any  designation  or  expressions  other 
than cost accountant on professional documents, visiting cards, letter heads or sign boards, unless it be a 
degree  of  a  University  established  by  law  in  India  or  recognised  by  the  Central  Government  or  a  title 
indicating membership of the 1[Institute of Cost Accountants of India] or of any other institution that has 
been recognised by the Central Government or may be recognised by the Council: 

Provided that a member in practice may advertise through a write up, setting out the services provided 

by him or his firm and particulars of his firm subject to such guidelines as may be issued by the Council; 

1. Subs. by Act 10 of 2012, s. 8, for “Institute of Cost Accountants of India” (w.e.f. 17-11-2006). 

24 

 
                                                           
(8)  accepts  a  position  as  cost  accountant  previously  held  by  another  cost  accountant  in  practice 

without first communicating with him in writing; 

(9) charges or offers to charge, accepts or offers to accept in respect of any professional employment, 
fees which are based on a percentage of profits or which are contingent upon the findings or results of 
such employment, except as permitted under any regulation made under this Act; 

(10)  engages  in  any  business  or  occupation  other  than  the  profession  of  cost  accountant  unless 

permitted by the Council so to engage: 

Provided  that  nothing  contained herein  shall  disentitle  a  cost  accountant  from  being  a  director  of a 
company  (not  being  a  managing  director  or  a  whole  time  director)  unless  he  or  any  of  his  partners  is 
interested in such company as accountant; 

(11)  allows  a  person  not  being  a  member  of  the  Institute  in  practice,  or  a  member  not  being  his 
partner  to  sign  on  his  behalf  or  on  behalf  of  his  firm,  any  cost  or  pricing  statements  or  any  other 
statements relating thereto. 

PART II 

Professional misconduct in relation to members of the Institute in service 

A  member  of  the  Institute  (other  than  a  member  in  practice)  shall  be  deemed  to  be  guilty  of 

professional misconduct, if he being an employee of any company, firm or person— 

(1) pays or allows or agrees to pay, directly or indirectly, to any person any share in the emoluments 

of the employment undertaken by him; 

(2) accepts or agrees to accept any part of fees, profit or gains from a lawyer, a cost accountant or 
broker engaged by such company, firm or person or agent or customer of such company, firm or person 
by way of commission or gratification. 

PART III 

Professional misconduct in relation to members of the Institute generally 

A  member  of  the  Institute,  whether in  practice  or  not,  shall  be  deemed  to  be  guilty  of  professional 

misconduct, if he— 

(1) not being a fellow of the Institute acts as a fellow of the Institute; 

(2) does not supply the information called for, or does not comply with the requirements asked for by 
the Institute, Council or any of its Committees, Director (Discipline), Board of Discipline, Disciplinary 
Committee, Quality Review Board or the Appellate Authority; 

(3) while inviting professional work from another cost accountant or while responding to tenders or 
enquiries or while advertising through a write up, or anything as provided for in items (6) and (7) of Part I 
of this Schedule, gives information knowing it to be false. 

Other misconduct in relation to members of the Institute generally 

PART IV 

A  member  of  the  Institute,  whether  in  practice  or  not,  shall  be  deemed  to  be  guilty  of  other 

misconduct, if— 

(1)  he  is  held  guilty  by  any  civil  or  criminal  court  for  an  offence  which  is  punishable  with 

imprisonment for a term not exceeding six months; 

(2) in the opinion of the Council he brings disrepute to the profession or the Institute as a result of his 

action whether or not related to his professional work. 

25 

 
  
 
 
THE SECOND SCHEDULE 

[See sections 21 (3), 21B (3) and 22] 

PART I 

Professional misconduct in relation to cost accountants in practice 

A cost accountant in practice shall be deemed to be guilty of professional misconduct, if he— 

(1) discloses information acquired in the course of his professional engagement to any person other 
than his client so engaging him, without the consent of his client, or otherwise than as required by any law 
for the time being in force; 

(2)  certifies  or  submits  in his  name,  or  in  the  name  of  his firm,  a  report  of  an examination  of  cost 
accounting and related statements unless the examination of such statements has been made by him or by 
a partner or an employee in his firm or by another cost accountant in practice; 

(3)  permits  his  name  or  the  name  of  his  firm  to  be  used  in  connection  with  an  estimate  of  cost  or 
earnings contingent upon future transactions in a manner which may lead to the belief that he vouches for 
the accuracy of the forecast; 

(4) expresses his opinion on cost or pricing statements of any business or enterprise in which he, his 

firm or a partner in his firm has a substantial interest; 

(5) fails to disclose a material fact known to him in a cost or pricing statement, which is not disclosed 
in a cost or pricing statement but disclosure of which is necessary in making such statement where he is 
concerned with such statement in a professional capacity; 

(6) fails to report a material mis-statement known to him to appear in a cost or pricing statement with 

which he is concerned in a professional capacity; 

(7) does not exercise due diligence, or is grossly negligent in the conduct of his professional duties; 

(8)  fails  to  obtain  sufficient  information  which  is  necessary  for  expression  of  an  opinion  or  its 

exceptions are sufficiently material to negate the expression of an opinion ; 

(9) fails to invite attention to any material departure from the generally accepted procedure of costing 

and pricing applicable to the circumstances; 

(10)  fails  to  keep  moneys  of  his  client  other  than  fees  or  remuneration  or  money  meant  to  be 
expended in a separate banking account or to use such moneys for purposes for which they are intended 
within a reasonable time. 

PART II 

Professional misconduct in relation to members of the Institute generally 

A  member  of  the  Institute,  whether in  practice  or  not,  shall  be  deemed  to  be  guilty  of  professional 

misconduct, if he— 

(1) contravenes any of the provisions of this Act or the regulations made thereunder or any guidelines 

issued by the Council; 

(2) being an employee of any company, firm or person, discloses confidential information acquired in 
the  course  of  his  employment,  except  as  and  when  required  by  any  law  for  the  time  being  in  force  or 
except as permitted by the employer; 

(3) includes in any information, statement, return or form to be submitted to the Institute, Council or 
any  of  its  Committees,  Director  (Discipline),  Board  of  Discipline,  Disciplinary  Committee,  Quality 
Review Board or the Appellate Authority any particulars knowing them to be false; 

(4) defalcates or embezzles moneys received in his professional capacity. 

26 

 
 
 
Other misconduct in relation to members of the Institute generally 

PART III 

A  member  of  the  Institute,  whether  in  practice  or  not,  shall  be  deemed  to  be  guilty  of  other 
misconduct,  if  he  is  held  guilty  by  any  civil  or  criminal  court  for  an  offence  which  is  punishable  with 
imprisonment for a term exceeding six months.] 

27 

 
 
